Inventory and Spares optimization

How can you evaluate and optimize...

...which spares are worth holding, in what numbers?
...the service levels that are really justifiable?
...procurement, vendor and supply chain strategies?
...inventory management options such as locations, pre-installed standby units and spares obsolescence issues?

Making sure that the right questions are asked. 

Most people realize that spares decisions need to consider such factors as:

  • Likelihood or frequency of usage
  • Cost of the item
  • Leadtime for obtaining one
  • Criticality (consequences of unavailability)


But these are just four of the considerations that can affect a spares decision. What about the storage costs, the ability to repair/reuse failed units, the ‘cost of capital tied up’ and vulnerability to deterioration while in storage or technology overtake (obsolescence)?

Our Solution?

DST Inventory & Spares Optimization Bundle

The SALVO Process and DST INVENTORY OPTIMIZER  & DST PROJECT/CHANGE EVALUATOR ensure that all the right questions are asked, that the inevitable uncertainties are explored, and the correct mathematics* are used to determine the costs and risks of different strategies.

And it is not enough simply to find the optimal answer – our process includes the vital transparency of why it is right, and how to explain the strategy to different stakeholders.

Using simple ‘storyboards’, these tools help you to capture expert knowledge, quantify risks and degradation patterns (with rigorous handling of uncertainty and range estimates).

Shutdown-critical tasks are then evaluated for optimal timing or intervals, along with cost, risk and performance effects of sub-optimal timing.

The bundling stage then explores shared timing, downtime and parallel work opportunities, with budget,  resources and legal compliance constraints.

* DST modeling has been independently validated by the University of Cambridge.

The Challenge:
How to ensure that the right spares are always available when needed?
But Also:
How to minimize the capital tied up in ‘just in case’ parts and equipment?

It is always difficult to determine which critical, strategic or contingency spares are worth holding, in what numbers. The frequency of usage may be low and uncertain. And the consequences of not having a vital part available when needed can be high (and also uncertain). Furthermore, the supply chain might be unreliable or volatile, and tracking interchangeability of parts can be a nightmare. Some spares can deteriorate in storage and others may be vulnerable to technology obsolescence. How can you navigate all these factors and make the optimal cost/risk decisions?

The DST INVENTORY & SPARES Bundle offers a highly flexible decision support tool used to identify the best value mix of costs, risks and benefits for a wide variety of spares and inventory decisions such as:

Should we hold a spare, and if so, how many?

Which vendor or spares design option offers the best value for money?

Should we refurbish failed items as future spares?

Shall we hold spares centrally, or in distributed local stores?

Should we hold whole equipment units or just component parts and ‘kits’?

Should we standardize on equipment designs for interchangeability?

Should we have dedicated designs and
associated spares?

Is it worth pre-installing a standby unit and/or hold spares in the warehouse?

What are the optimal service levels for different items of different criticalities?

"Using this method, we reduced inventory by 40% while also increasing our service levels."

One-off decisions or systematic batch reviews?

The DST INVENTORY & SPARES Bundle applies equally well to discrete decisions (e.g. shall I buy or replace a spare?) with little or no available hard data to work with, and to large scale optimization reviews of spares or materials using direct data inputs from purchasing and inventory management systems. 

The process is an excellent way to show what data is worth collecting in the first place, by quantifying the ‘cost of uncertainty’ (cost/risk impact of an incorrect decision due to data sensitivity).
So SALVO forms an integral part of any organization’s asset management and business decision-making. It helps everyone talk in the same language and demonstrate value-for-money.

We can enable you to:
  • Identify and demonstrate the optimal spares, standby equipment, or materials to hold
  • Evaluate standardization, interchangeability, or dedicated/shared materials strategies
  • Optimize inventory strategies, locations, service levels, obsolescence, and ‘shelf life’ risks
  • Evaluate and compare different vendors or supply chain options
  • Make clear decisions even if data is uncertain
  • Gain rapid agreement between conflicting interests to find the best compromise. 

SALVO and Decision Support Tools are used and proven in a wide range of asset types and industries in both the public and private sectors. 

DST Modules

Discover how the DST INVENTORY & SPARES Bundle combines with the other modules to benefit your organization.

Contact us

We would be happy to speak with you and learn how we can help you and your business.

Skip to content